Ford Motor CEO Alan Mulally had been called the front runner to replace Steve Ballmer. (Image: Ford.) Ford Motor CEO Alan Mulally, who Tuesday ended months of speculation that he was a top candidate for Microsoft's chief executive opening, was almost certainly in talks with the Redmond, Wash. company, said a messaging and public relations expert today.

"He did not deny that he was in talks with Microsoft," said Gene Grabowski, reading between the lines of an interview Mulally granted to a pair of Associated Press (AP) automotive reporters yesterday. "It's likely that he was [in talks with Microsoft] at some level. That's logical."

Grabowski is an executive vice president at Levick, a Washington, D.C. firm that specializes in crisis and corporate reputation messaging.

"I would like to end the Microsoft speculation because I have no other plans to do anything other than serve Ford," Mulally told the AP.

Mulally had been linked to the Microsoft job in large part because Ballmer went to the automotive executive for insights into a Ford reorganization labeled "One Ford" that Mulally managed. In July, Ballmer announced a similar restructuring of Microsoft, dubbed "One Microsoft," that was designed to increase collaboration in the company.

Wall Street had been pushing for Mulally, believing that his turnaround experience at Ford was what Microsoft needed to recover a luster worn thin by its failures to capitalize on the technology market's dramatic shift to mobile.

Wednesday, the market swallowed Mulally's statement: As of 3 p.m. ET, Microsoft shares were down 2%.

Mulally gave no additional information about the Microsoft position in the interview, such as whether he was offered the Microsoft job and turned it down, or even whether he had been in the running.

He did acknowledge that the swirling speculation had been a distraction for Ford, something multiple analysts pointed out months ago, and that Grabowski referred to today.

"Ford's competitors are locked down with CEOs, and Ford did not want to be left behind," Grabowski said. "Ford's board was very concerned that it looked in flux."

The timing of Mulally's interview was probably no coincidence, either, as the auto industry's largest and most important trade show, the North American Internal Auto Show in Detroit, begins Monday, Jan. 13, with a press preview. Ford is slated to open the rounds of press conferences in an 8:10 a.m. ET time slot. If Mulally had not quashed rumors before then, Ford would have lost valuable media time answering questions about their CEO rather than focusing reporters on their new car and truck models.

Grabowski said there was no way to know whether Mulally's withdrawal from the Microsoft race was a clue that the company would soon announce its choice.

"Possibly," Grabowski said when asked whether Mulally's comment indicated that he had been knocked out of the running or declined the job in the final stages of Microsoft's process. "But it's equally likely that this sets back [Microsoft's] timetable and sends them back to the drawing board if he was the preferred candidate. So much is opaque about CEO selections."

Originally, Microsoft had not set a definitive timetable, saying last summer only that Ballmer would retire within 12 months. But three weeks ago, apparently to soothe the market, which had been jittery about the time it was taking, the head of the CEO-search committee did the unusual and said he expected the process to wrap up in early 2014.

Financial analysts had expected Microsoft to hustle, and name a CEO in late 2013.

One date Microsoft's board may be looking at on its own calendar is Jan. 23, when the company will announce it fourth-quarter earnings. Before that, the board will meet to go over the financials.

Last August, Microsoft struck a deal with activist investment firm ValueAct and said it would offer a seat on the board to ValueAct president G. Mason Morfit at the first board meeting after the annual shareholders meeting, which took place in November. Morfit will be the first member not appointed by the board itself, and could be a wild card if a CEO has not been chosen by then.

But if a report Wednesday by Kara Swisher of re/code is accurate, Microsoft will miss that deadline and have to deal with Morfit: Swisher, who cited anonymous sources close to the board, said that Microsoft would not present its pick until at least February, perhaps even later.

Remaining candidates whose names have regularly been touted as possible Ballmer replacements include several current executives, such as Tony Bates, Satya Nadellal and Kevin Turner; and Stephen Elop, the former CEO of Nokia who is to rejoin Microsoft after the latter closes its acquisition of the Finnish firm's handset business.

Mulally was the highest-profile outside candidate to surface in reports last year.

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